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Debunking the Myths

Drug, oil, and insurance companies have spent millions of dollars to generate myths about how lawsuits are out of control and responsible for all of America’s ills. The facts tell a much different story.

Myth: The number of lawsuits filed is skyrocketing. Fact: The number of tort (personal injury) cases has been declining for years.

The number of tort (personal injury) cases has been declining for years. According to the National Center for State Courts, tort cases accounted for just 4.4 percent of all civil cases filed in 2008, and declined by 25 percent between 1999 and 2008. Tort filings in state courts decreased by six percent between 2007 and 2008.

According to the Justice Department under President George W. Bush, the number of federal tort cases resolved in U.S. District Courts fell by 79 percent between 1985 and 2003. In 1985, 3,600 tort trials were decided by a judge or jury in U.S. District Courts. By 2003, that number had dropped to less than 800.1

Additionally, the most recent statistics from the Administration’s Bureau of Justice Statistics show the number of tort trials at the state level has decreased. These statistics were compiled as part of the Bureau’s survey of state civil justice systems in the nation’s largest 75 counties. Among these counties, the number of tort trials decreased 31.8 percent between 1992 and 2001. 2

Myth: Health care costs are rising and doctors are unable to practice due to litigation. Fact: Health care costs are rising; however, medical malpractice litigation has nothing to do with it.

Health care costs are rising; however, medical malpractice litigation has nothing to do with it. According to the Congressional Budget Office, medical malpractice amounted to less than 2 percent of overall health care spending.3 The Government Accountability Office also found that malpractice cases have not widely affected access to health care. 4

According to the American Medical Association, the overall number of physicians is up more than 40 percent since 19905, while over the same time, the U.S. population increased by only 18 percent .6 The number of emergency physicians, neurosurgeons, and OB/GYNs has also increased significantly over the same time period.

Myth: Legal reform is needed because lawsuits hurt small businesses. Fact: Multiple surveys have shown that lawsuits are not a concern for small business owners.

Multiple surveys have shown that lawsuits are not a concern for small business owners. A survey from the National Association of Manufacturers suggests that “lawsuit abuse” ranks at the bottom of concerns for manufacturers.7 A 2008 survey from National Federation of Independent Business had similar results, with “costs and frequency of lawsuits / threatened suits” ranking 65th on a list of small business owners’ worries. 8

In reality, only big corporations and their front groups want to destroy the legal system so they can’t be held accountable for negligence and misconduct. Drug, oil, and insurance companies have tried to hide behind small business owners to accomplish this; however, these surveys reveal their true intentions.

Myth: Trial attorneys are trying to drive corporations out of business. Fact: A strong civil justice system allows deserving individuals to get justice and hold wrongdoers accountable.

Corporations, large and small, are all entitled to have profitable businesses. Most do so without being negligent or engaging in misconduct.

A strong civil justice system allows deserving individuals to get justice and hold wrongdoers accountable. Civil justice attorneys work to make sure all people have a fair chance through the legal system – even when it means taking on the most powerful corporations.

Myth: Lawsuits are out of control. Someone even sued because they spilled hot coffee on their lap! Fact: Unfortunately, the actual facts of this case make it no laughing matter.

Those looking to destroy the civil justice have continually mocked Stella Liebeck and the McDonald’s coffee case. Unfortunately, the actual facts of this case make it no laughing matter.

Ms. Liebeck’s injuries include third degree burns—the most severe—to her groin, inner thighs, and buttocks. She was hospitalized for eight days, during which time she underwent skin grafting and debridement treatments (the surgical removal of tissue).

Ms. Liebeck sought to settle her claim with McDonald’s for $20,000, but they refused. McDonald’s eventually produced documents showing more than 700 claims by people burned by its coffee between 1982 and 1993, some involving third degree burns similar to Ms. Liebeck. This history documented McDonald’s knowledge about the extent and nature of this hazard. McDonald’s own quality assurance manager testified that a burn hazard exists with any food served above 140 degrees; their coffee was kept warm at 185 degrees.

A jury awarded Ms. Liebeck $200,000 in compensatory damages, but reduced it to $160,000 because they found her 20 percent at fault for the spill. The jury also awarded her $2.7 million in punitive damages, equal to two days of McDonald’s coffee sales. This was eventually reduced to $480,000, even though the judge called McDonald’s conduct reckless, callous, and willful. Jurors expressed similar sentiments in interviews after the trial. Ms. Liebeck and McDonald’s eventually entered a post-verdict settlement.

Myth: Trial attorneys are charging outrageous hourly fees and leave victims with nothing if they win. Fact: Civil justice attorneys do not charge by the hour.

Civil justice attorneys do not charge by the hour like most other attorneys. Instead, their clients pay on what is called a “contingency fee basis.”

For over 200 years the contingency fee system has provided Americans who must go to court with a degree of access to justice that is unheard of in most other countries. Our system allows people who cannot afford to pay legal fees to obtain representation on a contingency fee basis. In personal injury and death cases, and in certain other types of litigation, the fee is based on a percentage of any money damages that are recovered.

Myth: My insurance rates are skyrocketing because of lawsuits. Fact: Your insurance premiums may be going up, but it has nothing to do with lawsuits.

Your insurance premiums may be going up, but it has nothing to do with lawsuits. Look no further than the insurance industry’s annual profit reporting. In 2007, insurance companies reported a near-record profit of $61.9 billion. In comparison, the insurance industry’s 2004 profit was $38.7 billion, which broke all previous records. Their profits continue to rise, and unfortunately, your premiums are following suit.

The insurance industry has also made the argument that awards and damages should be limited; however, have later admitted that caps will not lower premiums. For example, American Insurance Association spokesman Dennis Kelly told the Chicago Tribune in 2005 that, “We have not promised price reductions with tort reform.”

Several so-called “independent” think tanks or organizations have devised the notion that American families pay a yearly “tort tax,” or that the cost of litigation is passed on to taxpayers. These organizations, funded by oil, drug, tobacco, and insurance companies, produce studies that are a prime example of junk science. There is no methodology or academic basis for their results. Trying to pass off these organizations and their studies as legitimate is yet another scheme by corporations to avoid accountability in the courtroom and stack the deck against every day Americans.

Towers Perrin’s “tort cost” study has also been widely rejected. Read more »

Myth: Schools are cancelling recess because they are afraid of litigation. Fact: Recess has been canceled to meet requirements for teaching and testing hours.

School districts across the country are almost universal in blaming the elimination of recess on the need to meet requirements for teaching and testing hours.9

Myth: People aren’t volunteering to help with Little League, Boy / Girl Scouts, etc., because they are afraid of lawsuits. Fact: A federal law protects volunteers of nonprofits in the course of their charity work.

Similar to the previous myth, these lies are peddled by groups interested in destroying the civil justice system.

The Volunteer Protection Act of 1997 was passed to provide immunity for volunteers of nonprofits in the course of their charity work.